عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Nippon Steel, US Steel Send Letter to Biden on Merger Plans

The Edgar Thomas Plant of the United States Steel Corporation in Braddock, Pennsylvania, on October 27, 2022. Branden Eastwood/AFP/Getty Images
The Edgar Thomas Plant of the United States Steel Corporation in Braddock, Pennsylvania, on October 27, 2022. Branden Eastwood/AFP/Getty Images
TT
TT

Nippon Steel, US Steel Send Letter to Biden on Merger Plans

The Edgar Thomas Plant of the United States Steel Corporation in Braddock, Pennsylvania, on October 27, 2022. Branden Eastwood/AFP/Getty Images
The Edgar Thomas Plant of the United States Steel Corporation in Braddock, Pennsylvania, on October 27, 2022. Branden Eastwood/AFP/Getty Images

Nippon Steel and US Steel have sent a letter to US President Joe Biden about their planned $15 billion merger after media reported that he was preparing to block the deal, a spokesperson for the Japanese steelmaker said.

The spokesperson did not provide details about the letter's content, but said it was signed by Nippon Steel Chief Executive Eiji Hashimoto and US Steel CEO David Burritt as well as other executives.

US Steel did not immediately respond to a request for comment outside of US business hours. The US embassy in Japan did not immediately have comment.

Japan's biggest steelmaker is pursuing a cash deal to buy the 123-year-old US Steel, despite resistance from Biden, the United Steel Workers (USW) union and many members of Congress while a US national security review is conducted.

The deal has also been opposed by both Republican presidential nominee Donald Trump and Democratic nominee Kamala Harris. Both are vying to win the critical swing state of Pennsylvania, where US Steel is headquartered.

The Committee on Foreign Investment in the United States (CFIUS) told the companies in an Aug. 31 letter seen by Reuters the deal would create national security risks because it could hurt the supply of steel needed for critical transportation, infrastructure, construction and agriculture projects.

A top Nippon Steel executive and US Steel's CEO met with senior US officials on Wednesday in an effort to salvage the deal, a person familiar with the matter said.

The outcome of the meeting was not immediately clear.

The Japan Business Federation and a number of US business groups, in a letter to Treasury Secretary Janet Yellen on Wednesday, raised concerns that the Biden administration's national security review of the deal is being unduly influenced by political pressure.

On Friday, Japan's Minister of Economy, Trade and Industry Ken Saito declined to comment on the deal, saying that doing so would interfere in US domestic affairs.

But Saito added: “It is extremely important that Japanese and US companies continue to make transactions and the growth in deals constitutes a key element of the strong economic relationship between the two nations.”

Most Viewed

 
 
Business

Political Turmoil Shakes South Korea’s Economy

Protesters take part in a rally calling for the ouster of South Korea's impeached President Yoon Suk Yeol in front of the Gwanghwamun Gate of Gyeongbokgung Palace in Seoul on December 28, 2024. (Yonhap/AFP)
Protesters take part in a rally calling for the ouster of South Korea's impeached President Yoon Suk Yeol in front of the Gwanghwamun Gate of Gyeongbokgung Palace in Seoul on December 28, 2024. (Yonhap/AFP)
TT
TT

Political Turmoil Shakes South Korea’s Economy

Protesters take part in a rally calling for the ouster of South Korea's impeached President Yoon Suk Yeol in front of the Gwanghwamun Gate of Gyeongbokgung Palace in Seoul on December 28, 2024. (Yonhap/AFP)
Protesters take part in a rally calling for the ouster of South Korea's impeached President Yoon Suk Yeol in front of the Gwanghwamun Gate of Gyeongbokgung Palace in Seoul on December 28, 2024. (Yonhap/AFP)

After South Korea's president and his replacement were both deposed over a failed bid to impose martial law, deepening political turmoil is threatening the country's currency and shaking confidence in its economy.

The won, which plunged Friday to its lowest level against the dollar since 2009, has been in near-constant decline since President Yoon Suk Yeol's attempt to scrap civilian rule in early December.

Business and consumer confidence in Asia's fourth-largest economy have also taken their biggest hit since the start of the Covid-19 pandemic, according to figures released by the Bank of Korea.

Lawmakers impeached Yoon in mid-December on charges of insurrection, and on Friday they impeached his successor, acting president and prime minister Han Duck-soo, arguing that he refused demands to complete Yoon's removal from office and bring him to justice.

That thrust Finance Minister Choi Sang-mok into the additional roles of acting president and prime minister.

Choi has pledged to do all he can to end "this period of turmoil" and resolve the political crisis gripping the country.

- Constitutional question -

At the heart of the stalemate is the Constitutional Court, which will decide whether to uphold parliament's decision to impeach Yoon.

It must do so by a two-thirds majority, however. And because three of the court's nine seats are currently vacant, a unanimous vote is required to confirm the suspended president's removal.

Otherwise, Yoon will be automatically returned to office.

Lawmakers on Thursday nominated three judges to fill the vacant seats, but acting president Han refused to approve them, precipitating his own impeachment.

After an acrimonious day in which lawmakers from Yoon's party erupted in protest, the country's newest acting president sought to project calm.

"Although we are facing unexpected challenges once again, we are confident that our robust and resilient economic system will ensure rapid stabilization," Choi said Friday.

The 61-year-old career civil servant has inherited a 2025 budget -- adopted by the opposition alone -- which is 4.1 trillion won ($2.8 billion) less than the government had hoped for.

"There are already signs the crisis is having an impact on the economy," Gareth Leather of Capital Economics wrote in a note to clients, citing the dip in consumer and business confidence.

"The crisis is unfolding against a backdrop of a struggling economy," he added, with GDP growth expected to be just two percent this year, weighed down by a global slowdown in demand for semiconductors.

"Longer term, political polarization and resulting uncertainty could hold back investment in Korea," Leather wrote, citing the example of Thailand, another ultra-polarized country whose economy has stagnated since a coup in 2014.

- Democratic resilience? -

But other economists noted that the South Korean economy has so far weathered the chaos well.

As early as December 4, the day after Yoon declared martial law following a budget tussle with the opposition, the central bank promised to inject sufficient liquidity to stabilize the markets, and the Kospi Index has lost less than four percent since the start of the crisis.

"Like everyone, I was surprised when Yoon took those crazy measures," Park Sang-in, a professor of economics at Seoul National University, told AFP. "But there was a resilience of democracy."

"We come from being an underdeveloped country to one of the world's most dynamic economies in very few years, and Yoon Suk Yeol is a side effect of the growth," he added.

"Korean society was mature enough to counter his crazy actions."